{"id":1061,"date":"2013-06-04T10:00:39","date_gmt":"2013-06-04T04:30:39","guid":{"rendered":"http:\/\/myfinad.com\/blog\/?p=1061"},"modified":"2013-06-10T12:17:58","modified_gmt":"2013-06-10T06:47:58","slug":"if-you-were-warren-buffet-would-you-buy-this-property","status":"publish","type":"post","link":"https:\/\/www.myfinad.com\/resources\/2013\/06\/04\/if-you-were-warren-buffet-would-you-buy-this-property\/","title":{"rendered":"If you were Warren Buffet – Would you Buy this Property?"},"content":{"rendered":"

\"Warren<\/a><\/p>\n

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There\u00a0are\u00a0two parts to any real estate deal.<\/p>\n

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\n<\/div>\n

The HEADS Side of the Coin<\/b><\/p>\n

The often over-rated part of the deal is the PROPERTY itself.<\/p>\n

When it comes to buying real estate, logic often flies off the window first. Followed by common sense.<\/p>\n

As investors, we often focus on the wrong things while short listing properties \/ projects. The amenities, interiors, etc.\u00a0are\u00a0only superficial.\u00a0It is normal practice for a developer to therefore use these tactics as distractions so that\u00a0you\u00a0end up taking your focus off the more important facets.<\/p>\n

If\u00a0you\u00a0really\u00a0are\u00a0an investor (and not a collector)\u00a0you\u00a0have to dig deep.\u00a0Think of benchmarking yourself on\u00a0<\/b>Warren\u00a0Buffet – the most successful investor in the world – though he does only stocks. When investing, Buffet looks beyond the jazz and glitz that a company often projects and lets facts and numbers do the talking.<\/b><\/p>\n

So put on your dark-rimmed Buffet glasses and deeply introspect about the following core factors:<\/p>\n

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  1. Location analysis: What is the potential for appreciation? Demand v\/s oversupply? etc.<\/li>\n
  2. What is the efficiency ratio of the unit\u00a0you\u00a0intend to buy (carpet area to built up area ratio)??<\/li>\n
  3. Is the title\/other legal requirements clear?<\/li>\n
  4. What is the track record of the developer?<\/li>\n
  5. What\u00a0are\u00a0the payment terms and\u00a0are\u00a0there any opportunities for leverage?<\/li>\n
  6. Are\u00a0the agreement terms and condition acceptable or\u00a0are\u00a0there restrictive clauses in the same?<\/li>\n<\/ol>\n
    \n
    \n<\/div>\n

    The TAILS Side of the Coin<\/b><\/p>\n

    What\u00a0you\u00a0also need to realize is that there is an equally important other side to the deal. And that inseparable side of the coin is:<\/p>\n

    “YOU”<\/p>\n

    So is this real estate deal really for\u00a0you??<\/p>\n

    To understand that –\u00a0you\u00a0have to answer these key questions:<\/p>\n

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    1. Do\u00a0you\u00a0really need this real estate investment or\u00a0are\u00a0you\u00a0just under pressure to jump on the bandwagon and don’t want to be left behind?<\/li>\n
    2. Are\u00a0you\u00a0going to invest in the property or\u00a0are\u00a0you\u00a0going to end up staying in it?<\/li>\n
    3. Do\u00a0you\u00a0realize that projects generally take quite a few years to complete?<\/li>\n
    4. As an investor,\u00a0are\u00a0you\u00a0ready to invest in a property that while giving\u00a0you\u00a0good returns, may \u00a0offer no exit till possession of the property?<\/li>\n
    5. What is the proportion of your total current net worth to the property cost? What proportion of your cash flows will be the outgos\/EMIs?<\/li>\n
    6. Do\u00a0you\u00a0have a plan to have liquidity ready when the developer demands money for each stage of the property which he completes?<\/li>\n<\/ol>\n

      Though these\u00a0are\u00a0only broad questions, what we\u00a0are\u00a0trying to make\u00a0you\u00a0aware of is that any real-estate decision cannot be taken in isolation and in an ad-hoc manner. There has to be a lot of introspection and analysis of facts and data points to arrive at a decision.<\/p>\n

      \n
      \n<\/div>\n

      What we\u00a0<\/b>are\u00a0saying is that\u00a0you\u00a0need a plan, and the plan that needs to start with the basics of understanding\u00a0you, your needs, your goals, your cashflow requirements.\u00a0You,\u00a0you,\u00a0you.<\/b><\/p>\n

      That is where we at MFA\u00a0are\u00a0different. Our bread and butter is Personal Financial Planning using a world-class methodology. We can bring this core competency into play for\u00a0you, number crunch, and help\u00a0you\u00a0with an informed and unbiased analysis of whether your current financial situation allows\u00a0you\u00a0to make this all important decision.<\/p>\n

      So before\u00a0you\u00a0decide to take the plunge, get in touch.<\/p>\n

      <\/span><\/span><\/span><\/span><\/p>","protected":false},"excerpt":{"rendered":"

                  There\u00a0are\u00a0two parts to any real estate deal. The HEADS Side of the Coin The often over-rated part of the deal is the PROPERTY itself. When it comes to buying real estate, logic often flies off the window first. Followed by common sense. As investors, we often focus on the […]<\/p>\n

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